Exam 20: Process Costing

Under the first-in,first-out (FIFO)method,the current period equivalent units of production for the units in the beginning inventory are always 100% complete.

Both job order costing and process costing track the product costs of direct materials,direct labor,and manufacturing overhead through three inventory accounts on the balance sheet.

During September,the Filtering Department of Davis,Inc.had a beginning Work-in-Process Inventory of 700 units with costs of $135,000.During the month,it started and completed 700 units.It had 240 units in the ending Work-in-Process Inventory.What is the number of equivalent units of production for transferred in units in the Filtering Department in September under the first-in,first-out (FIFO)method?

The equivalent units of production for transferred in units are always 100% because ________.

Under a process costing system,product costs are accumulated with respect to jobs completed.

Waterfall Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had a zero beginning balance.During January,43,000 gallons of chemicals were started into production.During the month,34,000 gallons were completed,and 9,000 remained in process,partially completed.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly through the process. During January,the Mixing Department incurred $50,000 in direct materials costs and $211,200 in conversion costs.At the end of the month,the ending inventory in the Mixing Department was 60% complete with respect to conversion costs.The weighted-average method is used. The total cost of product in ending inventory was ________.(Round any intermediate calculations two decimal places,and your final answer to the nearest dollar. )

Delaware,Inc.purchased raw materials worth $300 for cash.The journal entry to record this transaction will include ________.

In a process costing system,each process or department has its own Work-in-Process Inventory account.

The production cost report for Department 1 shows that $160,000 was assigned to the 38,000 units transferred to Department 2.This transfer cost assigned to units transferred to Department 2 is recorded with a debit to Work-in-Process-Department 1.

LDR Manufacturing produces a pesticide chemical and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,42,000 fl.oz.of chemicals were started in production.Of these,32,000 fl.oz.were completed and 10,000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly through the process. At the end of the month,LDR calculated equivalent units.The ending inventory in the Mixing Department was 65% complete with respect to conversion costs.With respect to direct materials,what is the number of equivalent units in the ending inventory?

The production cost report for Department 2 shows that $453,000 was assigned to the 58,000 units transferred to Finished Goods Inventory.This cost assigned to Finished Goods Inventory is recorded with a debit to Work-in-Process-Department 2.

If a business operates in an industry that does not experience significant cost changes,should the business prepare its production cost report using the FIFO method or the weighted-average method? Explain your answer.

Pattern Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the first department-Mixing-had no beginning inventory.During January,48,000 fl.oz.of chemicals were started in production.Of these,38,000 fl.oz.were completed,and 10,000 fl.oz.remained in process.In the Mixing Department,all direct materials are added at the beginning of the production process,and conversion costs are applied evenly through the process. At the end of January,the equivalent unit data for the Mixing Department were as follows: * Percent complete for conversion costs: 44% In addition to the above,the costs per equivalent unit were $1.35 for direct materials and $5.20 for conversion costs.Using this data,calculate the full cost of the ending WIP balance in the Mixing Department.The weighted-average method is used.

A production cost report can help managers identify the most profitable products.

The Polishing Department of Generation Fixtures,Inc.had 15,000 units in process on June 1 and received 22,000 units from the Machining Department.During the month,it completed 31,000 units and transferred them to the Packaging Department and had 6,000 units in ending Work-in-Process Inventory.Calculate the number of units accounted for by the Polishing Department for June.

The Assembly Department of Fallon,Inc. ,manufacturer of computers,had 2,000 units of beginning inventory in September,and 3,000 units were transferred to it from the Production Department.The Assembly Department completed 1,500 units during the month and transferred them to the Packaging Department.Calculate the total number of units to account for by the Assembly Department.

The Polishing Department of Conversations,Inc.had 15,000 units in process on June 1 and received 25,000 units from the Machining Department.During the month,it completed 32,000 units and transferred them to the Packaging Department.Prepare the production cost report for the Polishing Department for the whole units for the month of June.(Use the first-in,first-out method. )

In process costing,production costs are accumulated by process.At the end of the period,the total production costs incurred must be split into two components.What are these two components?

Which of the following is an example of how managers use product cost reports to control costs?

If a business operates in an industry that experiences significant cost changes,it would be to its benefit to use the first-in,first-out (FIFO)method.